Tuesday, January 5th, 2010
The Orange County Register published a great article addressing short sales. In the article, real estate agents debate whether they are seeing any improvement in the way lenders process short sale requests. The article also highlights some benefits and pitfalls for sellers involved in short sales.
DHW asks: Do you think short sales are becoming easier?
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Tuesday, November 10th, 2009
Critics of the Housing Tax Credit were quieted, if only briefly, when the National Association of Realtors (NAR) released data for third quarter home sales. According to the trade group, home sales increased by nearly 6% over this same time last year. Despite the spike in sales, prices have fallen more than 11% during the same period. The U.S. median existing single-family price for the third quarter was $177,900.
Opponents of the housing tax credit feared an inflationary reaction in home prices. Although housing inventories are down, existing units still outweigh the demand.
NAR chief economist, Lawrence Yun, predicts home prices will stabalize next spring. His prediction may be overly optimistic. Foreclosures and short sales made up 30% of thrid quarter sales. There is no real evidence to suggest foreclosures will take a breather in 2010.
DHW asks: Do you see a bottom to the housing market?
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Monday, October 26th, 2009
There are two must-have guides for homeowners and real estate agents pursuing a VA compromise sale (commonly referred to as a ‘VA short sale’):
The first is written for real estate professionals and homeowners; the second for servicers (i.e. your mortgage lender).
Important facts to remember when negotiating an offer:
- After you have a fully executed contract, your lender will order a VA appraisal. VA will not approve the sale if the net proceeds are less than 88% of the new appraised value. Remember this when negotiating the price.
- For a compromise sale, VA discourages the seller from paying costs that are customarily paid by the buyer. You should have a strong argument ready for your lender if the contract reflects these expenses. VA may still approve these costs if the lender nets at least 88% of the appraised value.
- Don’t believe your lender if they tell you a customary seller’s expense is not approved by VA. (This is where the Servicer Loss Mitigation Program guide comes in handy. See the bottom of page 28 with regard to allowable costs.) This fact cannot be stressed enough: VA does not have a sanctioned list of “allowable” and “non-allowable” closing costs. If your lender uses this tactic to deny authorizing customary expenses, push back. Do not be afraid to call VA for backup (1-800-933-5499 or 1-800-319-9446). The VA is far more reasonable than your lender will have you believe.
DHW asks: Have you completed or attempted a VA compromise sale? How was your experience?
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